165 Economists Agreed in Advance with the 228 Nay Votes Yesterday
From WorldNetDaily September 25:
At least 165 economists have signed a letter to Congress members warning of three pitfalls in the Bush administration’s $700 billion proposal to deal with the Wall Street crisis.
Their objections are not partisan but seem to apply to any large-scale government bail-out/buy-in. [Emphasis added.]
The economists contend the plan is unfair, because it’s a “subsidy to investors at taxpayers’ expense.”
“Investors who took risks to earn profits must also bear the losses,” the economists say in their letter. “Not every business failure carries systemic risk. The government can ensure a well-functioning financial industry, able to make new loans to creditworthy borrowers, without bailing out particular investors and institutions whose choices proved unwise.”
The plan is ambiguous, they contend, as neither “the mission of the new agency nor its oversight are clear.”
“If taxpayers are to buy illiquid and opaque assets from troubled sellers, the terms, occasions, and methods of such purchases must be crystal clear ahead of time and carefully monitored afterwards,” the letter states.
If the plan is enacted, the economists argue further, “its effects will be with us for a generation.”